With less than ten weeks to the end of the financial year, it is time to start some serious tax planning.
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Your goals and needs may have shifted over the year, and your portfolio needs to keep up, with the right blend of assets to meet your goals.
Even if nothing has changed on the personal front, investment markets don’t sit still for long.
Property investors in Sydney and Melbourne for instance, have enjoyed tremendous value gains over the past few years but this may mean your portfolio is dramatically skewed towards bricks and mortar.
If that sounds like you, bear in mind rental yields on property are sitting at just 3.7 per cent across our state capitals, and a significant chunk of your wealth could be tied up in low-yielding assets.
The need to review your portfolio before June 30 isn’t just about market performance. It can also involve responding to new legislation. We’ve heard lots of speculation recently about Labor’s plan to scrap cash refunds for excess franking credits on Australian shares.
Altering your portfolio based on what may or may not happen is a gamble. Plenty has happened in other areas that could directly impact your portfolio. As a guide, since July 1, 2017 property investors can no longer claim the cost of travel to inspect a rental property.
Fine-tuning your portfolio ahead of June 30 can mean paying costs, and capital gains tax may apply to any profit you make on the sale of an investment.
The upside is hitting the new financial year with a portfolio that’s in tune with your goals and lifestyle.